Angel Securities views on Godrej Consumer, NIIT

Angel Securities on NIIT - Target Rs 83

 

Angel Securities is bullish on NIIT and has recommended buy rating on the stock with a target of Rs 83, in its research report.

"NIIT declared lower-than-expected results for 4QFY2010 registering a 1.9% decline in consolidated Net Revenues to Rs295cr. Bottom-line however, witnessed a spurt of 40.2% yoy for the quarter on a consolidated basis marking strong performance for the quarter. Excluding the share of profits from associates, Net Income grew 49% on account of the 400bp jump in EBIDTA Margins."

"We expect NIIT to clock CAGR of 10.3% and 16.6% in Top-line and Bottom-line respectively, over FY2010-12E. At current levels, the stock is trading at 11.6x FY2012E EPS. Based on the SOTP methodology, we have valued NIIT, excluding its stake in NIIT Tech, at 12x FY2012E EPS of Rs5.8, fetching Rs 69.6/share. We have valued the company's stake in NIIT Tech at Rs13/share (on market capitalisation) after providing 25% holding company discount, effectively resulting in an SOTP Target Price of Rs83. We recommend a Buy on the stock," says Angel Securities research report."

 

 

Angel Sec on Godrej Consumer - Target Rs 357

 

Angel Securities is bullish on Godrej Consumer and has recommended buy rating on the stock with a target of Rs 357.

"Godrej Consumer (GCPL) has entered into an agreement to acquire remaining 51% stake in Godrej Sara Lee (GSL), owned by its JV partner Sara Lee Corp for a consideration of Euro 185mn (Rs1,050cr) valuing GSL at Rs 2,065 crore. This acquisition will help GCPL catapult in becoming one of the strongest performers in the home and personal care space in India. Along with the Megasari acquisition in Indonesia, this transaction would make GCPL the second largest household insecticide player in Asia (outside Japan)."

"While we have not factored the deal into our numbers owing to a lack of funding details, based on our assumptions of full equity funding (10.2% dilution at CMP of Rs300), we believe the deal is likely to be EPS accretive by 8-10%. Moreover, with GCPL's wider portfolio, stronger performance of its International business and a potential upside trigger from further acquisitions (likely in Latin America, in talks with Embelleze and Issue), we believe that the stock still offers significant triggers for sustained performance. Hence, we have revised our Target Price upwards to Rs357 (Rs329), valuing GCPL at 23x FY2012E revised EPS of Rs 15.5 (based on our assumptions, does not include financials from the Tura and Megasari acquisitions)."